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Retention At Risk as Employers Struggle to Meet Benefits Needs

Employers across various industries and regions in the United States are struggling to meet their employees’ healthcare benefits needs—and employee satisfaction, well-being, and retention are at stake, according to the 13th annual Aflac WorkForces Report released by Aflac Inc., a leading provider of supplemental health insurance and products in the U.S. The Aflac WorkForces Report tracks the state of the American workplace among employees and employers, year after year, capturing trends, attitudes, needs, and experiences in healthcare benefits administration.

The Slow Burn of Burnout

The nationally representative survey underscores employees’ concerns about mental health—especially burnout. Employees want their employers to care about their overall well-being and provide resources to stay ahead of burnout, but the study shows their confidence is waning—causing some to consider other job opportunities.

Consistent with 2022 survey findings, more than half (57%) of all American workers say they are currently experiencing at least moderate levels of burnout. The most significant culprit is workplace stress—with heavy workloads as the biggest stressor—and it’s disproportionately affecting both women and younger workers.

Other survey findings include the following.

  • Workers’ confidence in how much employers care about them has declined significantly, reaching 48% in 2023, 56% in 2022, and 59% in 2021.
  • The overwhelming majority (89%) of employees who report high levels of burnout also have experienced other mental health challenges over the past year, including anxiety, depression, and trouble sleeping, among others.
  • Approximately 67% of Gen Z and 64% of millennials say they are facing moderate to high levels of burnout.
  • Women are vulnerable, too, with 75% reporting burnout at work as opposed to 58% of men.

“Survey results on mental health and well-being in the workplace are alarming and continue to be challenging, but employers can face these challenges head-on and turn them into opportunities,” said Jeri Hawthorne, senior vice president and chief human resources officer, Aflac Inc. “Offering benefits that include mental health tools and resources, in addition to work-life balance perks, such as flexible work schedules, can help with employee satisfaction, retention, and recruitment.”

A Balancing Act for Employers

The steady rise in benefits costs and looming concerns of increasing prices of everyday goods and services are causing companies to cautiously navigate balancing their benefits budgets, satisfying employees—and, more importantly than ever, retaining them. The study uncovered that 53% are at least somewhat likely to accept a position with lower pay but better benefits.

“The cost of benefits is creating a ripple effect for employers,” said Hawthorne. “They want to remain competitive by offering benefits their employees are looking for while staying budget conscious. They’re also faced with retention pressure and tough decisions to push expenses to employees, such as increasing employee deductibles or employees’ share of health insurance premiums.”

The Great Divide in Benefits Satisfaction and Understanding

The gaps are widening between companies’ perceptions and workers’ lived experiences with benefits satisfaction and understanding, according to the study. In fact, approximately 78% of companies believe their workers are highly satisfied with their benefits, compared to only 59% of employees who express high satisfaction. While fewer than half (48%) of workers say they understand benefits costs well, 79% of companies think they do.

Financial Fragility, Smarter Choices

Workers’ stress and anxiety about their financial health are caused not only by rising costs, but also by the potential of unexpected medical expenses. This has led employees to spend less and save more over the last year, according to the survey. More workers have financial resources on hand to cover a medical emergency, compared to last year. However, the state of financial wellness among American workers—and their outlook on the economy—remain fragile.

Key research findings include the following.

  • More than half (51%) of workers have savings on hand for a medical bill—up from 45% in 2022—but 50% can’t afford more than $1,000 in out-of-pocket medical expenses.
  • Approximately 54% of workers say they could survive a month without a paycheck, down from 62% in 2022.
  • Half (50%) of workers think the economy is worse than it was a year ago, while 30% indicate that they are in a worse financial position than they were a year ago.

Financial instability disproportionately impacts Hispanic workers. Key research findings to support this include the following.

  • About two-thirds (66%) of all Hispanic workers could not go more than a month without a paycheck—compared to 51% of non-Hispanic workers.
  • Approximately 57% of Hispanic workers could not afford $1,000 in unexpected out-of-pocket, healthcare-related costs, compared to 49% of non-Hispanic workers.
  • When faced with an unexpected medical expense, Hispanic workers would also be more likely to have to rely on family or friends (29% versus 24% of non-Hispanic workers) or seek a second job for supplemental income (26% versus 18% of non-Hispanic workers).
  • Hispanic workers are less likely than their non-Hispanic counterparts to be able to pull from a checking or savings account to cover unexpected medical expenses (43% versus 53%).

Meeting Employees Where They are in the Digital Space

Survey responses show employees’ needs are not being met when it comes to enrolling in and managing their benefits online. Most employers recognize the importance of having a benefits provider that offers a user-friendly, digital interface. A small proportion of workers value the convenience of managing their benefits online.

Key survey findings include the following.

  • Approximately 82% of employees overall—and 87% of millennials—think it’s important to enroll and manage their benefits online.
  • While 82% of workers stress the importance of being able to manage benefits online, 45% of employers don’t offer the ability to enroll online.
  • This year, 64% of organizations offer online benefits management, down from 67% in 2022, and 79% in 2021.
  • Eight in 10 employers indicate that it is very important for their benefits provider to be innovative and lead in digital technology.
  • Nearly one-third of employees say they aren’t comfortable working with AI to manage their benefits, whereas fewer employers (one in 10) feel the same way.

 

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